Annex 6: Major state trading companies - food imports

In addition to state entities that play an important role in their country’s food imports, described below, other state entities may also import foods to supply a particular constituency - e.g. for the army.

Cape Verde

Until 1998, market food supplies were essentially handled by the Government, through two parastatal companies: EMPA for maize, rice and other major items (bean, sugar, milk) and MOAVE for wheat. These two companies supplied the market through commercial imports and saw to domestic distribution. They were also responsible for food aid sold for counterpart funds and government financing of food security activities, in agreement with donors. Since 1998, this system has been liberalized, and private traders operate alongside the Government agencies.

Comoros

The Office National d'Importation et de Commercialisation du Riz has the monopoly on rice imports in the Comoros.

Cuba

The Empresa Cubana Importadora Alimentos (Alimport), a Government agency operating under Cuba’s Ministry of Foreign Trade, accounts for some 95 percent of agricultural imports into the country.

Egypt

Two state entities are involved in grain and vegetable oil imports: the General Authority for Supply Commodities (GASC) and the Food Industries Holding Company (FIHC).

GASC is an agency of the Ministry for Supply and Home Trade, which imports all wheat (but also other commodities such as pulses, dairy products, red meat live animals and vegetable oils) for distribution in the subsidized sales system (2.5 to 3 million tonnes a year, a bit less than 40 percent of total wheat imports; it also buys a similar volume of locally produced wheat). As one of the largest wheat importers in the world, Egypt buys seven million tonnes annually, traditionally mainly from the US. American wheat traditionally competes with French, Australian and Canadian products for Egyptian Government tenders, but since 2001, many private-sector millers have been turning to cheaper products from Hungary, Ukraine and the Russian Federation with lower freight costs. GASC has been able to maintain its high purchasing levels of wheat from the US through credit facilities provided by American aid programmes to Egypt.

FIHC is an agency of the Ministry of Public Enterprises, involved in the trade in sugar, wheat and vegetable oils. It sells in the free market.

Kenya

The main responsibility of the National Cereals and Produce Board (NCPB) is to reduce fluctuations of domestic maize prices, and to operate the national strategic grain reserve. While in some years, the NCPB exports maize, in deficit years it imports grains alongside private-sector importers. It buys through an open tender, and pays from its own funds, or using local bank credit lines or special government credits.

Malawi

The National Food Reserve Agency is responsible for managing the country’s grain reserves, but it also imports grain when necessary (and administrates food aid grants). Contracts are usually tendered when they exceed K300, 000 and they are paid in advance.

Mauritania

A parastatal, Société Nationale d'Importation & d'Exportation, in which the Government has a 55 percent share, imports and distributes food alongside a number of private-sector traders.

Mauritius

The State Trading Corporation^[25] set up in 1982 is responsible for importing a number of essential commodities into Mauritius: petroleum products, cement, and rice and wheat flour. It maintains supplies of these commodities and ensures their efficient marketing and distribution. The Corporation has an annual turnover of US$220 million. It handles some 80 000 tonnes of wheat flour which are purchased from the local miller or imported. Flour is a government subsidized commodity. The State Trading Corporation is the sole importer (some 50 000 tonnes a year) of subsidized non-luxury rice from India, China and Pakistan, and is also involved in the import of luxury rice where it does not have a monopoly.

Morocco

The Office National Interprofessionnel des Céréales et des légumineuses accounts for around a quarter of total cereal imports into Morocco. Most of this is used for the production of flour for subsidized sales.

Sri Lanka

The Cooperative Wholesale Establishment (CWE) comes under the purview of the Ministry of Commerce & Consumer Affairs. It is also known popularly as SATHOSA. It is the largest trading organization in the country, with an annual turnover of around US$210 million. The CWE used to have a monopoly on all grain imports into Sri Lanka, but this was liberalized in 2002. Wheat is are now imported directly by the country’s sole flour mill, while for rice and vegetable oil imports, the CWE competes with the private sector. For these rice and vegetable oil imports, the Establishment issues open tenders to both local and foreign bidders.

Tunisia

The National Cereals Board (Office tunisien des céréals, OTC) has a monopoly on the imports of the two major grains, wheat and barley. It can, however, also authorize private traders to make imports on its behalf. It generally imports on the basis of a restricted tender or direct contacts with the principal traditional suppliers to the board.

The National Vegetable Oils Board (Office National de l'Huile) has the monopoly of vegetable oil imports.

In the case of both Boards, import financing is generally on the basis of opening letters of credit payable 180 days from the bill of lading. Only if the products have to undergo some form of value added in Tunisia (e.g. processing or packaging), can there be separate bank financing for periods of up to one year. Banks provide an overdraft facility, and may cover their risks through pledges over the stock.

Zambia

The main responsibility of the Crop Marketing Authority (CMA) is to manage the country’s strategic grain reserves. Private grain millers account for most imports. In cases of food shortage, the Authority can also act as an importer. The CMA was created in 2002 to replace an earlier government agency with the same responsibilities, the Food Reserve Agency, which had a history of defaulting on its payment obligations.